21 Enterprise Software Stocks to Build Your Watchlist
Amid the AI shakeout, these B2B software stocks deserve a closer look
The software industry has come under significant pressure in 2025, driven by fears of AI-led disruption and the start of 2026 has been even more challenging. Yet history shows that with every major technological shift, short-term impacts tend to be overstated while long-term effects are underestimated.
In software, enterprise platforms are well positioned to become AI enablers. While business models may need to evolve, many of these companies have the potential not only to adapt, but to emerge stronger and create incremental value.
In this edition of Thematic Opportunities, we examine the risks and opportunities AI presents for the enterprise software sector. We also highlight 21 stocks that stand out for their positioning, resilience or long-term potential.
For paid subscribers, we take the analysis one step further. Beyond identifying individual stock ideas, I apply the full Quality Stocks Investment Framework, including thematic screeners based on the Quality Stocks Score, fair value estimates, detailed Total Shareholder Return (TSR) breakdowns, defined buy zones and my investment verdict (Attractive / Conditional / Unattractive). This added layer is designed to bridge the gap between high-level insights and actual execution, helping long-term investors make more disciplined and risk-aware decisions.
Out of the 21 stocks analyzed in this article:
3 receive a HIGHLY ATTRACTIVE verdict, indicating strong fundamentals and a valuation that offers a compelling long-term entry point
7 receive a MODERATELY ATTRACTIVE verdict, reflecting solid fundamentals overall, though with some limitations such as valuation, risks or execution considerations
8 receive a CONDITIONAL verdict, where the core business appears sound but one or two notable concerns (like debt, risk or valuation) temper the investment case
2 receive a MODERATELY UNATTRACTIVE verdict, due to meaningful weaknesses or an elevated valuation despite solid fundamentals, making patience for a better entry point advisable
1 receive a HIGHLY UNATTRACTIVE verdict, with significant fundamental, valuation or structural issues that make the risk-reward profile unfavorable at this time
The AI threat
Concerns around software stem from the idea that AI could fundamentally reshape how business applications are built, used and priced. Large language models and AI-native tools lower development barriers, enabling new entrants to replicate core features faster and at lower cost, potentially compressing pricing power.
At the same time, AI copilots may reduce seat-based usage by automating tasks previously performed by human users, challenging traditional per-seat SaaS models. There is also a risk of disintermediation, where AI layers sit on top of existing software stacks, capturing value while relegating incumbent platforms to commoditized infrastructure.
Combined with uncertainty around data ownership, model integration costs and return on AI investments, these dynamics have fueled fears that enterprise software’s historically strong moats could weaken in an AI-driven world.
A more balanced view
A more balanced view suggests that AI is unlikely to be an existential threat to enterprise software. While AI can automate tasks and accelerate feature development, it does not replace the complexity of enterprise workflows, regulatory requirements, security constraints and deep system integrations (complex IT architecture) that companies manage.
Enterprise software vendors control the data, distribution and trust relationships that AI models need to operate at scale. Additionally the main processes of the company are based on these software making impossible to collaborate without them.
In practice, AI is being embedded as an enhancement (improving productivity, decision-making and automation) rather than eliminating the need for core platforms. Although pricing models may evolve, the mission-critical nature of these systems and their high switching costs suggest that value is more likely to shift within enterprise software ecosystems than to disappear.
Final point: one of the key challenges companies face when implementing AI is that many proof of concepts are promising but remain disconnected from core business processes. This highlights the need to rely on existing enterprise systems (enhanced by AI) rather than standalone AI tools that fail to scale across the organization.
What from now
What we are also observing is a familiar pattern seen in every sector at some point: valuations became extremely elevated as the narrative turned overwhelmingly bullish. Eventually, fundamentals reassert themselves, and valuations normalize.
Further downside remains possible, which is precisely why this phase is better suited to building a watchlist than rushing to deploy capital. Identifying the highest-quality companies and defining attractive entry points is central to the Quality Stocks Investment Framework.
21 stocks
HR Software (HCM): Automatic Data Processing, Paychex, Paycom
Engineering, Design, Construction & PLM: Nemetschek, Dassault Systemes, Autodesk
Cybersecurity: Fortinet, Palo Alto Networks, Qualys, Crowdstrike
Customer Relationship: Salesforce
Supply Chain: SPS Commerce
Semiconductor: Synopsys, Cadence Design
Data: Snowflake, Palantir
Life Sciences: Veeva
Digital Marketing: Adobe
Core Enterprise Platform: SAP, Servicenow, Tyler Technologies
Unlock the Full Analysis. For each of the 21 stocks, I apply the Quality Stocks Investment Framework in full:
Quality Score-based screener
Fair value estimates & detailed Total Shareholder Return (TSR) breakdowns
Defined buy zones
And a clear investment verdict: Attractive, Conditional or Unattractive
This is where insights turn into action. Here is a preview of the full Quality Stocks Investment Framework in action, featuring a detailed example
